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Global Islamic Funds expected to grow to $77bn by 2019 - Daily News Egypt

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Global Islamic Funds expected to grow to $77bn by 2019

84% of total Islamic AUM held in eight countries, Saudi Arabia and Malaysia account for 69% of total AUM, says a Thomson Reuters report

Global Islamic funds under management are expected to grow to $77bn at the least by 2019, according to a Thomson Reuters report.

The report revealed the results of its ” Global Islamic Asset Management Outlook” at the World Islamic Funds Conference in Bahrain on 19 May, where the agency indicated that currently ” Islamic funds are a $60bn industry”.

Even though the industry has fundamental opportunities for growth, it is projected it will face obstacles to bridge its demand-supply gap that is equivalent to $108bn, the report highlighted.

Assets Under Management (AUM) of total global Islamic funds witnessed a 5.3% growth in 2014, with an 11% increase in the number of funds the report said.

It also highlighted that, in the same year, “84% of total Islamic AUM was held in eight countries, with Saudi Arabia and Malaysia accounting for 69% of total AUM”.

Outside of the aforementioned countries, the industry seems to operate lacking support from the government and with a non-backing regularity framework.

In addition to the unavailability of distinct “Sharia-compliant investment avenues”; the report noted.

The report was delivered based on surveying investors, key asset managers, and financial institutions amongst others, whereby the most favoured investment destination for asset managers and investors was the GCC.

For 2015 and 2016, Sukuk and equities were chosen as investors’ and asset managers’ most favoured asset types, the report added.

The report did not mention Egypt’s status when it comes to Islamic banking, however, Head of the Egyptian Islamic Finance Association (EIFA) Mohamed El-Beltagy had previously said that Islamic banking clients in Egypt estimated approximately 2.5 million, constitute about 20% of the Egyptian banks clients.

The size of Islamic banking business in Egypt until 30 June 2014 amounted to approximately EGP 125bn.

The Egyptian banking market has a total of 39 banks, including 14 banks licensed by the Central Bank of Egypt (CBE) to offer Islamic banking products.

There a total of 135 branches of Egyptian Islamic banks accounting for 3.7% of the number of Egyptian bank branches. Abu Dhabi Islamic Bank (ADIB) comes at the forefront, with 70 branches, followed by AlBaraka Bank having 32 branches (27 operating and 5 in the construction and fitting process), and Faisal Islamic Bank (FIB) with 31 branches.


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